Australia thermal coal prices climb to $100/tonne

* Increased Chinese interest seen ahead of winter

* Indonesian rains tighten regional supplies

By Rebekah Kebede

PERTH, Oct 29 Australia's thermal coal prices,
a benchmark for Asia, rose over $1 a tonne during the last week
as continuing concern about wet weather in both Indonesia and
Australia as well as Chinese buying interest boosted prices.

Thermal coal on the globalCOAL Newcastle index for the week
to date was $100.48 per tonne for prompt delivery on Friday, up
from $99.03 a week earlier.

Chinese interest in importing coal has ramped up in recent
weeks as it prepares for winter, helping boost the index price,
traders said. [ID:nSGE69S0AL]

China, the world's largest consumer of coal, is stocking up
on coal ahead of what promises to be a chilly winter and also
in preparation for the Asian Games, which the nation will host
in November.

However, Chinese buying interest resulted in few deals,
with offers unattractively low, and which has affected the
psychology of the Australian market, one Singapore-based broker
said.

Despite China's interest in coal for the winter, thermal
coal on the globalCOAL Newcastle Index for November delivery
dipped during the week to $104.50 tonne on Friday, while
December deliveries were at $102.25 per tonne.

Production losses due to rains in Indonesia also continue
to tighten supplies in the region, with many producers
reporting that they have fallen five to ten percent short of
their production targets.

Rains in Queensland have also hit some Australian coal
production in the past few months, but the weather has mostly
hit coking coal, with thermal coal producers not as affected.

However, an intense cyclone season this year will likely
hit thermal coal mines as well and tighten supply
significantly, traders and analysts said.

A strong La Nina weather system, which brings higher
rainfall over the western Pacific is expected to bring six to
seven cyclones in the coal-producing northeast, up from an
average of four, according to the national weather bureau.
[ID:nSGE69I02V]

Australia's cyclone season lasts from November through
April.

WEEK AHEAD

Chinese demand will remain in focus in the long-term, with
the market waiting to see if utilities increase offer prices to
market levels.

The market continues to seek additional clarification on
Indonesia's decree that would allow miners to sell low-quality
coal below government reference prices this year.
[ID:nJAK261747]

Australian and Indonesian will be closely watched, with
those in the industry looking out for further indications on
the 2010/11 cyclone season.
(Editing by Ed Lane)